Konka Group Co., Ltd. Third Quarter Report 2018
KONKA GROUP CO., LTD.
THIRD QUARTER REPORT 2018
2018-83
October 2018
1
Konka Group Co., Ltd. Third Quarter Report 2018
Part I Important Notes
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,
supervisors and senior management of Konka Group Co., Ltd. (together with its consolidated
subsidiaries, the “Company”, except where the context otherwise requires) hereby guarantee
the factuality, accuracy and completeness of the contents of this Report and its summary, and
shall be jointly and severally liable for any misrepresentations, misleading statements or
material omissions therein.
All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.
Liu Fengxi, the Company’s legal representative, Li Chunlei, the Company’s Chief Financial
Officer (CFO), and Feng Junxiu, head of the Company’s financial department (equivalent to
financial manager) hereby guarantee that the financial statements carried in this Report are
factual, accurate and complete.
This Report and its summary have been prepared in both Chinese and English. Should there
be any discrepancies or misunderstandings between the two versions, the Chinese versions
shall prevail.
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Konka Group Co., Ltd. Third Quarter Report 2018
Part II Key Corporate Information
I Key Consolidated Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
30 September 2018 31 December 2017 Change (%)
Total assets (RMB) 31,459,422,268.91 23,558,735,469.78 33.54%
Equity attributable to the listed
8,015,667,877.14 7,994,145,476.61 0.27%
company’s shareholders (RMB)
YoY change
Q3 2018 Q1-Q3 2018 YoY change (%)
(%)
Operating revenue (RMB) 12,136,315,129.29 38.58% 29,761,729,899.11 47.60%
Net profit attributable to the listed
88,041,649.48 -10.14% 429,834,688.51 233.60%
company’s shareholders (RMB)
Net profit attributable to the listed
company’s shareholders before -202,316,654.64 -487.53% -503,187,267.44 -537.82%
exceptional items (RMB)
Net cash generated from/used in
-- -- -2,896,984,300.56 18.68%
operating activities (RMB)
Basic earnings per share (RMB/share) 0.0366 -10.07% 0.1785 233.64%
Diluted earnings per share
0.0366 -10.07% 0.1785 233.64%
(RMB/share)
Weighted average return on equity (%) 1.10% -2.21% 5.24% 0.91%
Exceptional gains and losses:
√ Applicable □ Not applicable
Unit: RMB
Item Q1-Q3 2018 Note
Gain or loss on disposal of non-current assets (inclusive of impairment allowance
207,054,203.32
write-offs)
Government subsidies charged to current profit or loss (exclusive of government subsidies
given in the Company’s ordinary course of business at fixed quotas or amounts as per 157,182,395.52
government’s uniform standards)
Gain or loss on investments or assets entrusted to other entities for management 146,587,621.83
Gain or loss on fair-value changes in trading financial assets and liabilities & investment 25,624,758.24
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Konka Group Co., Ltd. Third Quarter Report 2018
income from disposal of trading financial assets and liabilities and available-for-sale
financial assets (exclusive of effective portion of hedges that arise in the Company’s
ordinary course of business)
Gain or loss on loan entrustments 984,930.51
Non-operating income and expense other than above 25,052,366.37
Other gains and losses that meet definition of exceptional gain/loss 543,741,891.45
Less: Income tax effects 96,238,978.51
Non-controlling interests effects (net of tax) 76,967,232.78
Total 933,021,955.95 --
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or
listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering
Their Securities to the Public—Exceptional Gain/Loss Items:
√ Applicable □ Not applicable
Amount
Item Reason
(RMB)
Tax rebates Recurrent government subsidies given in the Company’s ordinary course of business at fixed
45,548,282.80
on software quotas or amounts as per government’s uniform standards
II Total Number of Shareholders and Holdings of Top 10 Shareholders at 30 September 2018
1. Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting
Rights as well as Holdings of Top 10 Shareholders
Unit: share
Number of ordinary Number of preferred shareholders with resumed voting
88,816 0
shareholders rights (if any)
Top 10 shareholders
Shares in pledge or
Shareholdin
Nature of Number of Restricted frozen
Name of shareholder g
shareholder shares shares Shar
percentage Status
es
OVERSEAS CHINESE TOWN State-owned
21.75% 523,746,932 0
ENTERPRISES CO., LTD legal person
CITIC SECURITIES
Foreign legal
BROKERAGE (HONG KONG) 7.56% 182,100,202 0
person
CO., LTD.
Foreign legal
HOLY TIME GROUP LIMITED 2.33% 56,139,100 0
person
GUOYUAN SECURITIES Foreign legal 2.25% 54,203,779 0
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Konka Group Co., Ltd. Third Quarter Report 2018
BROKER (HK) CO., LTD. person
Foreign legal
GAOLING FUND,L.P. 2.19% 52,801,250 0
person
Domestic
ZHANG XIAOYU 0.95% 22,803,978 0
natural person
CHINA MERCHANTS State-owned
0.93% 22,485,024 0
SECURITIES (HK) LIMITED legal person
Foreign natural
NAM NGAI 0.90% 21,712,140 0
person
YUNNAN INTERNATIONAL
TRUST CO., LTD-JULI NO. 48 Other 0.88% 21,145,380 0
SINGLE CAPITAL TRUST
Domestic
WANG LEI 0.82% 19,811,420 0
natural person
Top 10 unrestricted shareholders
Shares by type
Name of shareholder Unrestricted shares
Type Shares
OVERSEAS CHINESE TOWN ENTERPRISES CO., RMB-denominate
523,746,932 523,746,932
LTD d ordinary stock
Domestically
CITIC SECURITIES BROKERAGE (HONG KONG)
182,100,202 listed foreign 182,100,202
CO., LTD.
stock
Domestically
HOLY TIME GROUP LIMITED 56,139,100 listed foreign 56,139,100
stock
Domestically
GUOYUAN SECURITIES BROKER (HK) CO., LTD. 54,203,779 listed foreign 54,203,779
stock
Domestically
GAOLING FUND,L.P. 52,801,250 listed foreign 52,801,250
stock
RMB-denominate
ZHANG XIAOYU 22,803,978 22,803,978
d ordinary stock
Domestically
CHINA MERCHANTS SECURITIES (HK) LIMITED 22,485,024 listed foreign 22,485,024
stock
Domestically
NAM NGAI 21,712,140 listed foreign 21,712,140
stock
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Konka Group Co., Ltd. Third Quarter Report 2018
YUNNAN INTERNATIONAL TRUST CO., RMB-denominate
21,145,380 21,145,380
LTD-JULI NO. 48 SINGLE CAPITAL TRUST d ordinary stock
RMB-denominate
WANG LEI 19,811,420 19,811,420
d ordinary stock
Jialong Investment Limited, a wholly-funded subsidiary of the Company’s first majority
shareholder Overseas Chinese Town Enterprises Co. (“OCT Group” for short), holds
Related or acting-in-concert 180,001,110 and 18,360,000 common shares in the Company respectively through CITIC
parties among shareholders Securities Brokerage (Hong Kong) Co., Ltd. and China Merchants Securities (HK) Limited.
above Jialong Investment Limited and Overseas Chinese Town Enterprises Co. are parties acting in
concert. Other than that, it is unknown whether the other shareholders are related parties or
acting-in-concert parties or not.
Zhang Xiaoyu holds 22,803,978 A-shares in the Company through her account of collateral
Top 10 ordinary shareholders
securities for margin trading in Huaxi Securities Co., Ltd. Wang Lei holds 19,811,420
involved in securities margin
A-shares in the Company through his account of collateral securities for margin trading in GF
trading (if any)
Securities Co., Ltd.
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted
ordinary shareholders of the Company conducted any promissory repo during the Reporting Period.
□ Yea √ No
No such cases in the Reporting Period.
2. Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
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Konka Group Co., Ltd. Third Quarter Report 2018
Part III Significant Events
I Changes in Selected Consolidated Financial Statement Line Items and Explanation of why
√ Applicable □ Not applicable
(I) During the Reporting Period, with “Technology + Industry + Urbanization” as the development
direction, the Company proactively carried out a medium- and long-term strategic development
plan featuring “One Centric Orientation, Two Development Paths, Three Development Strategies
and Four Business Groups”. Based on its consumer electronics business (color TVs, white goods
and mobile phones), the Company gradually extends towards strategic emerging industries, the
technology park industry as well as the Internet service and supply chain management sectors. As a
result, four major collaborating business groups—the technology park business group, the industrial
product business group, the platform service business group and the investment & finance business
group—have taken shape. Among these, the environmental protection and new material businesses
have been put in place, and the supply chain management and Internet service businesses see
expanding scales and stronger profitability due to further business model refinements.
(II) Exceptional items have an effect of RMB933 million on the consolidated net profit achieved
during the nine months ended 30 September 2018.
(III) Changes in Selected Consolidated Financial Statement Line Items
Unit: RMB’0,000 (in RMB ten thousand yuan)
30 September 31 December
Item Change Change (%) Main reason for change
2018 2017
Financial assets Changes in the fair value of forward forex
at fair value contracts
2,319.85 29.68 2,290.17 7,716.21%
through profit or
loss
Accounts higher revenue
477,097.15 344,309.59 132,787.56 38.57%
receivable
Goodwill Acquisition of 51% equity interests in
Shandong Econ Technology Co., Ltd.,
86,441.84 359.77 86,082.07 23,926.97% GuangDong XingDa HongYe Electronic Co.,
Ltd. and Jiangxi Konka New Material
Technology Co., Ltd.
Item Q1~Q3 2018 Q1~Q3 2017 Change Change (%) Main reason for change
Operating 2,976,172.99 2,016,361.90 959,811.09 47.60% Rapid growth in emerging businesses
revenue
Cost of sales 2,806,358.27 1,803,304.05 1,003,054.22 55.62% Rapid growth in emerging businesses
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Konka Group Co., Ltd. Third Quarter Report 2018
Gain on changes 6,994.07 -13,667.72 20,661.79 151.17% Changes in the fair value of forward forex
in fair value contracts
II Progress, Influence and Solutions Associated with Significant Events
√ Applicable □ Not applicable
(I) Regarding the strategic cooperation agreement with the Chuzhou municipal government, so far,
the Technological Innovation Centre Phase II project has won the bid for the target land, and the
other projects are still under negotiation.
(II) In terms of the private placement of corporate bonds, the no-objection letter stating the
compliance of the private placement with the transfer conditions has been received from the
Shenzhen Stock Exchange. And the commercial factoring securitization and the securitization of
accounts receivable are under review by the Shenzhen Stock Exchange.
Announcement on significant event Disclosure date Website link to announcement
Announcement on Signing a Strategic
http://www.cninfo.com.cn/finalpage/201
Cooperation Agreement with Shenzhen 2018-9-26
8-09-26/1205464322.PDF
Binhai Fund Management Co., Ltd.
Announcement on the Completion of the
http://www.cninfo.com.cn/finalpage/201
Registration of a Private Equity Fund Set 2018-9-7
8-09-07/1205418780.PDF
up by the Company for M&As
Reminder of the Nanjing K-Star Cloud http://www.cninfo.com.cn/finalpage/201
2018-8-14
Network Headquarters to Be Established 8-08-14/1205282245.PDF
Reminder of the Zibo High-End
http://www.cninfo.com.cn/finalpage/201
Equipment Industrial Park to Be 2018-8-14
8-08-14/1205282322.PDF
Established
Announcement on a Joint Stock
http://www.cninfo.com.cn/finalpage/201
Company Winning the Bid for Land Use 2018-8-11
8-08-11/1205274958.PDF
Right
Announcement on Progress of the
http://www.cninfo.com.cn/finalpage/201
Transfer of the 51% Stake in Kunshan 2018-7-3
8-07-03/1205112552.PDF
Kangsheng
III Commitments that the Company’s Actual Controller, Shareholders, Related Parties and
Acquirers, as well as the Company Itself and Other Parties, Failed to Fulfill on Time during
Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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Konka Group Co., Ltd. Third Quarter Report 2018
IV 2018 Annual Operating Performance Forecast
Warning of a forecast loss on or a forecast significant year-on-year change in net profit for year
2018, as well as explanation of why:
□ Applicable √ Not applicable
V Securities Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VI Wealth Management Entrustment
√ Applicable □ Not applicable
Unit: RMB’0,000
Type of wealth Outstanding amount
Funding source Principal Overdue amount
management before maturity
Wealth management
product purchased Self-funded 0 74,350 0
from trust company
Wealth management
product purchased Self-funded 0 2,000 0
from bank
Total 0 76,350 0
High-risk wealth management entrustments with amounts that are individually significant, or with
low security, low liquidity, or no protection of the principal:
□ Applicable √ Not applicable
Wealth management entrustments with possible impairments including an expectedly unrecoverable
principal:
□ Applicable √ Not applicable
VII Investments in Derivative Financial Instruments
√ Applicable □ Not applicable
Funding source U.S. dollar financings
Legal matters involved (if
N/A
applicable)
Disclosure date of board
announcement approving 24 May 2014
derivative investment (if any)
Disclosure date of general meeting
10 June 2014
announcement approving
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Konka Group Co., Ltd. Third Quarter Report 2018
derivative investment (if any)
We engage in forward forex transactions to reduce the currency risk when securing
Analysis of risks and control
foreign-currency financing. This is very needed in our routine operation and is in
measures associated with
compliance with the applicable laws and regulations. We have formulated the Management
derivative investments held in
Rules of Konka Group Co., Ltd. for Investment In Derivative Financial Instruments,
Reporting Period (including but
making clear the relevant consideration and approval procedure, risk control, etc.. We
not limited to market risk, liquidity
always sign forward forex contracts with large banks such as the Bank of China, which
risk, credit risk, operational risk,
operate steadily and have good credit standing, which could help prevent loss on forward
legal risk, etc.)
forex contracts due to bank failure.
How we usually measure the fair value of derivative financial instruments: Based on the
Changes in market prices or fair forward forex sales and purchase contracts that are signed between the Company and
value of derivative investments in banks and have not expired in a Reporting Period, we recognize the differences between
Reporting Period (fair value the quotations for these contracts on the balance sheet dates provided by the banks and the
analysis should include contractual prices as transactional financial assets or liabilities, and the profit/loss on fair
measurement method and related value changes is recognized accordingly. Because these contracts have locked in exchange
assumptions and parameters) rates, no changes will occur when comparing the fair value on signing dates with that on
delivery dates.
Major changes in accounting
policies and specific accounting
principles adopted for derivative No material changes
investments in Reporting Period
compared to last reporting period
It is considered necessary for the Company to lock in foreign-currency financing costs
Opinion of independent directors through financial instruments, because it could effectively reduce the currency risk when
on derivative investments and risk securing foreign-currency financing. The Company has formulated the internal control
control mechanism for investment in derivative financial instruments, and the relevant risk control
measures that the Company has taken are considered effective.
Unit: RMB’0,000
Type of derivative Beginning Ending
Gain/loss in Ending investment amount as a percentage of
financial contractual contractual
Reporting Period the Company’s ending net asset value
instrument amount amount
Forward foreign
74,021.85 78,363.14 3,082.14 9.78%
exchange contract
VIII Visits Paid to the Company for Purposes of Research, Communication, Interview, etc.
during Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
IX Irregularities in Provision of Guarantees for External Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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Konka Group Co., Ltd. Third Quarter Report 2018
X Occupation of the Company’s Capital by Controlling Shareholder or Its Related Parties for
Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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Konka Group Co., Ltd. Third Quarter Report 2018
Part IV Financial Statements
I Financial Statements
1. Consolidated Balance Sheet
Prepared by Konka Group Co., Ltd.
30 September 2018
Unit: RMB
Item 30 September 2018 31 December 2017
Current assets:
Monetary capital 4,076,675,667.50 3,212,044,851.08
Settlement reserve
Interbank loans granted
Financial assets at fair value through profit or loss 23,198,545.84 296,799.53
Derivative financial assets
Notes and accounts receivable 8,340,316,638.21 8,621,764,935.49
Including: Notes receivable 3,569,345,113.63 5,178,668,988.23
Accounts receivable 4,770,971,524.58 3,443,095,947.26
Prepayments 1,271,782,723.99 467,123,091.74
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract reserve
Other receivables 928,237,545.58 184,218,356.16
Financial assets purchased under resale agreements
Inventories 5,833,561,767.43 4,690,363,565.53
Assets classified as held for sale
Current portion of non-current assets 2,844,117.50
Other current assets 1,546,759,137.20 1,715,326,868.81
Total current assets 22,023,376,143.25 18,891,138,468.34
Non-current assets:
Loans and advances to customers
Available-for-sale financial assets 873,112,236.33 712,170,399.09
Held-to-maturity investments
Long-term receivables 706,595,979.87
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Konka Group Co., Ltd. Third Quarter Report 2018
Long-term equity investments 2,417,508,165.57 1,319,987,343.74
Investment property 212,232,174.29 216,455,629.99
Fixed assets 2,305,024,733.93 1,587,170,348.35
Construction in progress 790,894,726.10 135,863,821.01
Productive living assets
Oil and gas assets
Intangible assets 498,801,019.69 205,057,773.69
R&D expense
Goodwill 864,418,367.99 3,597,657.15
Long-term prepaid expense 109,741,833.73 150,060,937.30
Deferred income tax assets 586,195,079.79 307,942,263.12
Other non-current assets 71,521,808.37 29,290,828.00
Total non-current assets 9,436,046,125.66 4,667,597,001.44
Total assets 31,459,422,268.91 23,558,735,469.78
Current liabilities:
Short-term borrowings 12,159,913,288.77 6,927,472,037.35
Borrowings from central bank
Customer deposits and interbank deposits
Interbank loans obtained
Financial liabilities at fair value through profit or loss 443,528.00 47,482,470.50
Derivative financial liabilities
Notes and accounts payable 4,366,053,416.81 4,153,391,578.68
Advances from customers 927,567,645.90 640,510,784.17
Financial assets sold under repurchase agreements
Handling charges and commissions payable
Payroll payable 281,181,764.05 291,370,297.67
Taxes payable 268,099,904.56 1,326,569,094.53
Other payables 2,572,819,506.51 1,644,083,269.81
Reinsurance payables
Insurance contract reserve
Payables for acting trading of securities
Payables for underwriting of securities
Liabilities directly associated with assets classified as held for
sale
Current portion of non-current liabilities 12,135,739.84 374,358.99
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Konka Group Co., Ltd. Third Quarter Report 2018
Other current liabilities
Total current liabilities 20,588,214,794.44 15,031,253,891.70
Non-current liabilities:
Long-term borrowings 523,000,000.00 167,000,000.00
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables 724,238,969.59 61,538.46
Long-term payroll payable 10,169,777.94 13,361,821.86
Provisions 288,634.49 6,181,865.10
Deferred income 115,789,446.71 130,049,911.87
Deferred income tax liabilities 58,033,748.68 12,636,633.40
Other non-current liabilities
Total non-current liabilities 1,431,520,577.41 329,291,770.69
Total liabilities 22,019,735,371.85 15,360,545,662.39
Owners’ equity:
Share capital 2,407,945,408.00 2,407,945,408.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 104,732,242.30 104,732,242.30
Less: Treasury stock
Other comprehensive income -14,527,694.38 3,697,458.95
Specific reserve
Surplus reserves 1,217,644,874.79 1,217,644,874.79
General reserve
Retained earnings 4,299,873,046.43 4,260,125,492.57
Total equity attributable to owners of the Company as the parent 8,015,667,877.14 7,994,145,476.61
Non-controlling interests 1,424,019,019.92 204,044,330.78
Total owners’ equity 9,439,686,897.06 8,198,189,807.39
Total liabilities and owners’ equity 31,459,422,268.91 23,558,735,469.78
Legal representative: Liu Fengxi Chief Financial Officer: Li Chunlei
Head of financial department: Feng Junxiu
2. Balance Sheet of the Company as the Parent
Unit: RMB
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Konka Group Co., Ltd. Third Quarter Report 2018
Item 30 September 2018 31 December 2017
Current assets:
Monetary capital 1,775,589,124.86 1,760,838,390.83
Financial assets at fair value through profit or loss 23,198,545.84 296,799.53
Derivative financial assets
Notes and accounts receivable 10,501,092,995.23 7,596,218,302.24
Including: Notes receivable 1,827,449,083.56 2,864,064,309.99
Accounts receivable 8,673,643,911.67 4,732,153,992.25
Prepayments 1,961,297,504.54 1,066,260,182.37
Other receivables 4,048,187,670.10 4,341,467,382.86
Inventories 311,558,704.81 2,090,697,937.23
Assets classified as held for sale
Current portion of non-current assets 100,000,000.00
Other current assets 878,813,025.79 1,547,454,872.74
Total current assets 19,499,737,571.17 18,503,233,867.80
Non-current assets:
Available-for-sale financial assets 565,612,236.33 562,612,236.33
Held-to-maturity investments
Long-term receivables
Long-term equity investments 5,327,019,276.57 2,649,074,424.45
Investment property 212,232,174.29 216,455,629.99
Fixed assets 467,865,515.67 482,020,892.58
Construction in progress 99,387,467.10 79,927,345.88
Productive living assets
Oil and gas assets
Intangible assets 90,780,033.00 91,718,400.70
R&D expense
Goodwill
Long-term prepaid expense 83,593,443.35 78,305,555.97
Deferred income tax assets 473,094,215.80 279,324,511.96
Other non-current assets 20,000,000.00 20,000,000.00
Total non-current assets 7,339,584,362.11 4,459,438,997.86
Total assets 26,839,321,933.28 22,962,672,865.66
Current liabilities:
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Konka Group Co., Ltd. Third Quarter Report 2018
Short-term borrowings 7,364,190,141.56 3,269,730,888.60
Financial liabilities at fair value through profit or loss 443,528.00 47,482,470.50
Derivative financial liabilities
Notes and accounts payable 8,792,773,028.90 8,561,630,481.98
Advances from customers 330,530,942.86 601,036,147.76
Payroll payable 153,454,774.54 163,066,135.71
Taxes payable 92,860,929.35 1,070,771,570.12
Other payables 2,413,839,215.18 1,918,409,927.12
Liabilities directly associated with assets classified as held for
sale
Current portion of non-current liabilities
Other current liabilities
Total current liabilities 19,148,092,560.39 15,632,127,621.79
Non-current liabilities:
Long-term borrowings 285,000,000.00 167,000,000.00
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables
Long-term payroll payable
Provisions 288,634.49 6,181,865.10
Deferred income 85,485,533.22 94,590,560.82
Deferred income tax liabilities 30,015,322.73
Other non-current liabilities
Total non-current liabilities 400,789,490.44 267,772,425.92
Total liabilities 19,548,882,050.83 15,899,900,047.71
Owners’ equity:
Share capital 2,407,945,408.00 2,407,945,408.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 111,525,163.22 111,525,163.22
Less: Treasury stock
Other comprehensive income -1,646,283.60 -1,970,304.62
Specific reserve
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Konka Group Co., Ltd. Third Quarter Report 2018
Surplus reserves 1,217,644,874.79 1,217,644,874.79
Retained earnings 3,554,970,720.04 3,327,627,676.56
Total owners’ equity 7,290,439,882.45 7,062,772,817.95
Total liabilities and owners’ equity 26,839,321,933.28 22,962,672,865.66
3. Consolidated Income Statement for Q3
Unit: RMB
Item Q3 2018 Q3 2017
1. Revenue 12,136,315,129.29 8,757,653,006.20
Including: Operating revenue 12,136,315,129.29 8,757,653,006.20
Interest income
Premium income
Handling charge and commission income
2. Operating costs and expenses 12,513,181,900.60 8,752,019,700.99
Including: Cost of sales 11,621,326,279.61 7,922,849,249.06
Interest expense
Handling charge and commission expense
Surrenders
Net claims paid
Net amount provided as insurance contract reserve
Expenditure on policy dividends
Reinsurance premium expense
Taxes and surcharges 22,256,789.30 71,791,544.49
Selling expense 511,335,968.05 510,030,189.59
Administrative expense 194,171,683.61 94,181,249.13
R&D expense 89,738,422.31 69,036,697.70
Finance costs 68,240,652.10 86,178,068.83
Including: Interest expense 266,966,287.29 115,236,884.80
Interest income 98,892,687.14 30,063,671.03
Asset impairment loss 6,112,105.62 -2,047,297.81
Add: Other income 141,693,252.31 8,824,888.51
Investment income (“-” for loss) 270,593,341.32 108,748,021.30
Including: Share of profit or loss of joint ventures and
7,581,610.96 -5,172,588.27
associates
Gain on changes in fair value (“-” for loss) 10,085,276.33 -33,599,441.19
Foreign exchange gain (“-” for loss)
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Konka Group Co., Ltd. Third Quarter Report 2018
Asset disposal income (“-” for loss) -147,012.51
3. Operating profit (“-” for loss) 45,358,086.14 89,606,773.83
Add: Non-operating income 15,634,997.65 32,615,396.90
Less: Non-operating expense 5,920,162.45 5,496,656.85
4. Profit before tax (“-” for loss) 55,072,921.34 116,725,513.88
Less: Income tax expense -115,426,383.66 16,307,135.59
5. Net profit (“-” for net loss) 170,499,305.00 100,418,378.29
5.1 Net profit from continuing operations (“-” for net loss)
5.2 Net profit from discontinued operations (“-” for net loss)
Net profit attributable to owners of the Company as the parent 88,041,649.48 97,974,481.26
Net profit attributable to non-controlling interests 82,457,655.52 2,443,897.03
6. Other comprehensive income, net of tax -12,097,422.41 6,030,691.93
Attributable to owners of the Company as the parent -13,373,312.59 6,042,757.71
6.1 Items that will not be reclassified to profit or loss
6.1.1 Changes in net liabilities or assets caused by
remeasurements on defined benefit pension schemes
6.1.2 Share of other comprehensive income of investees
that will not be reclassified to profit or loss under equity method
6.2 Items that may subsequently be reclassified to profit or
-13,373,312.59 6,042,757.71
loss
6.2.1 Share of other comprehensive income of investees
that will be reclassified to profit or loss under equity method
6.2.2 Gain/Loss on changes in fair value of
21,330.65
available-for-sale financial assets
6.2.3 Gain/Loss arising from reclassification of
held-to-maturity investments to available-for-sale financial
assets
6.2.4 Effective gain/loss on cash flow hedges
6.2.5 Differences arising from translation of foreign
-13,373,312.59 6,021,427.06
currency-denominated financial statements
6.2.6 Other
Attributable to non-controlling interests 1,275,890.18 -12,065.78
7. Total comprehensive income 158,401,882.59 106,449,070.22
Attributable to owners of the Company as the parent 74,668,336.89 104,017,238.97
Attributable to non-controlling interests 83,733,545.70 2,431,831.25
8. Earnings per share
8.1 Basic earnings per share 0.0366 0.0407
18
Konka Group Co., Ltd. Third Quarter Report 2018
8.2 Diluted earnings per share 0.0366 0.0407
Legal representative: Liu Fengxi Chief Financial Officer: Li Chunlei
Head of financial department: Feng Junxiu
4. Income Statement of the Company as the Parent for Q3
Unit: RMB
Item Q3 2018 Q3 2017
1. Operating revenue 4,440,642,646.78 3,637,822,430.85
Less: Cost of sales 4,461,216,408.91 3,285,464,737.51
Taxes and surcharges 3,290,938.91 6,078,418.20
Selling expense 318,949,025.34 369,047,354.26
Administrative expense 116,016,183.63 48,517,847.59
R&D expense 26,533,247.55 56,834,001.84
Finance costs 42,077,470.06 84,765,740.63
Including: Interest expense 157,525,819.04 102,050,421.87
Interest income 47,340,463.92 26,722,362.75
Asset impairment loss
Add: Other income 37,349,655.22 5,955,256.85
Investment income (“-” for loss) 282,414,798.36 91,017,958.19
Including: Share of profit or loss of joint ventures and
-7,560,003.70 -4,372,739.06
associates
Gain on changes in fair value (“-” for loss) 10,085,276.33 -47,067,901.39
Asset disposal income (“-” for loss) 607.74
2. Operating profit (“-” for loss) -197,590,289.97 -162,980,355.53
Add: Non-operating income 966,927.34 8,944,099.57
Less: Non-operating expense 285,098.31 1,422,633.94
3. Profit before tax (“-” for loss) -196,908,460.94 -155,458,889.90
Less: Income tax expense -77,096,924.08 -45,753,296.57
4. Net profit (“-” for net loss) -119,811,536.86 -109,705,593.33
4.1 Net profit from continuing operations (“-” for net loss)
4.2 Net profit from discontinued operations (“-” for net loss)
5. Other comprehensive income, net of tax 5,222,526.42 -476,538.62
5.1 Items that will not be reclassified to profit or loss
5.1.1 Changes in net liabilities or assets caused by
remeasurements on defined benefit pension schemes
5.1.2 Share of other comprehensive income of investees that
will not be reclassified to profit or loss under equity method
19
Konka Group Co., Ltd. Third Quarter Report 2018
5.2 Items that may subsequently be reclassified to profit or
5,222,526.42 -476,538.62
loss
5.2.1 Share of other comprehensive income of investees that
will be reclassified to profit or loss under equity method
5.2.2 Gain/Loss on changes in fair value of
4,296,185.76
available-for-sale financial assets
5.2.3 Gain/Loss arising from reclassification of
held-to-maturity investments to available-for-sale financial assets
5.2.4 Effective gain/loss on cash flow hedges
5.2.5 Differences arising from translation of foreign
926,340.66 -476,538.62
currency-denominated financial statements
5.2.6 Other
6. Total comprehensive income -114,589,010.44 -110,182,131.95
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
5. Consolidated Income Statement for Q1~Q3
Unit: RMB
Item Q1~Q3 2018 Q1~Q3 2017
1. Revenue 29,761,729,899.11 20,163,618,985.63
Including: Operating revenue 29,761,729,899.11 20,163,618,985.63
Interest income
Premium income
Handling charge and commission income
2. Operating costs and expenses 30,546,938,674.14 20,247,905,896.83
Including: Cost of sales 28,063,582,724.87 18,033,040,507.13
Interest expense
Handling charge and commission expense
Surrenders
Net claims paid
Net amount provided as insurance contract reserve
Expenditure on policy dividends
Reinsurance premium expense
Taxes and surcharges 49,903,363.92 106,221,136.53
Selling expense 1,614,517,042.56 1,484,033,496.13
Administrative expense 421,990,456.18 261,536,322.23
20
Konka Group Co., Ltd. Third Quarter Report 2018
R&D expense 226,747,319.07 165,789,725.57
Finance costs 104,533,561.51 197,060,964.29
Including: Interest expense 495,028,664.94 281,156,133.12
Interest income 238,028,339.28 91,651,593.91
Asset impairment loss 65,664,206.03 223,744.95
Add: Other income 264,719,535.81 45,663,280.02
Investment income (“-” for loss) 802,351,913.03 175,753,593.36
Including: Share of profit or loss of joint ventures and
13,656,793.55 -9,746,882.46
associates
Gain on changes in fair value (“-” for loss) 69,940,688.81 -136,677,198.92
Foreign exchange gain (“-” for loss)
Asset disposal income (“-” for loss) 63,575,092.87
3. Operating profit (“-” for loss) 415,378,455.49 452,763.26
Add: Non-operating income 42,852,490.62 155,962,505.19
Less: Non-operating expense 11,871,912.02 9,132,194.96
4. Profit before tax (“-” for loss) 446,359,034.09 147,283,073.49
Less: Income tax expense -132,872,432.79 12,468,362.62
5. Net profit (“-” for net loss) 579,231,466.88 134,814,710.87
5.1 Net profit from continuing operations (“-” for net loss)
5.2 Net profit from discontinued operations (“-” for net loss)
Net profit attributable to owners of the Company as the parent 429,834,688.51 128,845,749.12
Net profit attributable to non-controlling interests 149,396,778.37 5,968,961.75
6. Other comprehensive income, net of tax -16,498,381.12 3,804,131.34
Attributable to owners of the Company as the parent -18,225,153.33 3,793,051.23
6.1 Items that will not be reclassified to profit or loss
6.1.1 Changes in net liabilities or assets caused by
remeasurements on defined benefit pension schemes
6.1.2 Share of other comprehensive income of investees
that will not be reclassified to profit or loss under equity method
6.2 Items that may subsequently be reclassified to profit or
-18,225,153.33 3,793,051.23
loss
6.2.1 Share of other comprehensive income of investees
that will be reclassified to profit or loss under equity method
6.2.2 Gain/Loss on changes in fair value of
-31,342.08 -11,326,667.93
available-for-sale financial assets
6.2.3 Gain/Loss arising from reclassification of
held-to-maturity investments to available-for-sale financial assets
21
Konka Group Co., Ltd. Third Quarter Report 2018
6.2.4 Effective gain/loss on cash flow hedges
6.2.5 Differences arising from translation of foreign
-18,193,811.25 15,119,719.16
currency-denominated financial statements
6.2.6 Other
Attributable to non-controlling interests 1,726,772.21 11,080.11
7. Total comprehensive income 562,733,085.76 138,618,842.21
Attributable to owners of the Company as the parent 411,609,535.18 132,638,800.35
Attributable to non-controlling interests 151,123,550.58 5,980,041.86
8. Earnings per share
8.1 Basic earnings per share 0.1785 0.0535
8.2 Diluted earnings per share 0.1785 0.0535
6. Income Statement of the Company as the Parent for Q1~Q3
Unit: RMB
Item Q1~Q3 2018 Q1~Q3 2017
1. Operating revenue 10,997,211,162.08 9,910,535,075.58
Less: Cost of sales 10,419,241,341.62 8,729,304,645.07
Taxes and surcharges 13,586,744.27 16,947,221.66
Selling expense 1,115,535,743.30 1,080,921,951.42
Administrative expense 241,930,804.62 138,351,880.64
R&D expense 128,379,273.19 155,310,598.70
Finance costs 188,923,238.66 212,325,826.30
Including: Interest expense 445,544,643.70 297,300,342.27
Interest income 160,404,469.05 69,627,939.33
Asset impairment loss 36,873,991.62 2,244,928.43
Add: Other income 79,741,765.34 32,371,847.25
Investment income (“-” for loss) 1,441,862,076.64 168,781,887.76
Including: Share of profit or loss of joint ventures and
5,680,179.60 -10,868,433.24
associates
Gain on changes in fair value (“-” for loss) 69,940,688.81 -110,323,281.75
Asset disposal income (“-” for loss) 19,557.06
2. Operating profit (“-” for loss) 444,304,112.65 -334,041,523.38
Add: Non-operating income 14,841,432.79 55,898,870.46
Less: Non-operating expense 5,725,462.45 4,011,872.35
3. Profit before tax (“-” for loss) 453,420,082.99 -282,154,525.27
Less: Income tax expense -164,010,095.13 -83,867,535.94
22
Konka Group Co., Ltd. Third Quarter Report 2018
4. Net profit (“-” for net loss) 617,430,178.12 -198,286,989.33
4.1 Net profit from continuing operations (“-” for net loss)
4.2 Net profit from discontinued operations (“-” for net loss)
5. Other comprehensive income, net of tax 5,546,547.44 -12,284,652.66
5.1 Items that will not be reclassified to profit or loss
5.1.1 Changes in net liabilities or assets caused by
remeasurements on defined benefit pension schemes
5.1.2 Share of other comprehensive income of investees that
will not be reclassified to profit or loss under equity method
5.2 Items that may subsequently be reclassified to profit or loss 5,546,547.44 -12,284,652.66
5.2.1 Share of other comprehensive income of investees that
will be reclassified to profit or loss under equity method
5.2.2 Gain/Loss on changes in fair value of
4,296,185.76 -11,358,312.00
available-for-sale financial assets
5.2.3 Gain/Loss arising from reclassification of
held-to-maturity investments to available-for-sale financial assets
5.2.4 Effective gain/loss on cash flow hedges
5.2.5 Differences arising from translation of foreign
1,250,361.68 -926,340.66
currency-denominated financial statements
5.2.6 Other
6. Total comprehensive income 622,976,725.56 -210,571,641.99
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
7. Consolidated Cash Flow Statement for Q1~Q3
Unit: RMB
Item Q1~Q3 2018 Q1~Q3 2017
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 24,472,986,972.47 12,987,769,338.60
Net increase in customer deposits and interbank deposits
Net increase in borrowings from central bank
Net increase in loans from other financial institutions
Premiums received on original insurance contracts
Net proceeds from reinsurance
Net increase in deposits and investments of policy holders
Net increase in proceeds from disposal of financial assets at
fair value through profit or loss
23
Konka Group Co., Ltd. Third Quarter Report 2018
Interest, handling charges and commissions received
Net increase in interbank loans obtained
Net increase in proceeds from repurchase transactions
Tax rebates 312,128,742.81 130,863,528.45
Cash generated from other operating activities 2,865,828,267.19 2,759,126,679.00
Subtotal of cash generated from operating activities 27,650,943,982.47 15,877,759,546.05
Payments for commodities and services 24,117,693,794.31 11,185,702,814.55
Net increase in loans and advances to customers
Net increase in deposits in central bank and in interbank loans
granted
Payments for claims on original insurance contracts
Interest, handling charges and commissions paid
Policy dividends paid
Cash paid to and for employees 1,235,221,504.02 713,115,942.78
Taxes paid 1,593,043,900.48 1,158,672,182.51
Cash used in other operating activities 3,601,969,084.22 3,967,958,429.50
Subtotal of cash used in operating activities 30,547,928,283.03 17,025,449,369.34
Net cash generated from/used in operating activities -2,896,984,300.56 -1,147,689,823.29
2. Cash flows from investing activities:
Proceeds from disinvestment 45,531,154.28 224,007,998.00
Investment income 100,982,942.46 111,276,583.85
Net proceeds from disposal of fixed assets, intangible assets
1,851,025.13 172,255.79
and other long-lived assets
Net proceeds from disposal of subsidiaries or other business
141,294,742.26
units
Cash generated from other investing activities 1,392,285,000.00 1,564,279,083.79
Subtotal of cash generated from investing activities 1,681,944,864.13 1,899,735,921.43
Payments for acquisition of fixed assets, intangible assets and
267,022,282.19 72,123,850.33
other long-lived assets
Payments for investments 450,546,156.00 2,022,767,387.50
Net increase in pledged loans granted
Net payments for acquisition of subsidiaries and other business
927,532,476.11
units
Cash used in other investing activities 774,880,000.00 922,780,798.39
Subtotal of cash used in investing activities 2,419,980,914.30 3,017,672,036.22
Net cash generated from/used in investing activities -738,036,050.17 -1,117,936,114.79
24
Konka Group Co., Ltd. Third Quarter Report 2018
3. Cash flows from financing activities:
Capital contributions received 189,790,594.60
Including: Capital contributions by non-controlling interests
189,790,594.60
to subsidiaries
Increase in borrowings obtained 11,340,498,767.13 4,899,799,364.16
Net proceeds from issuance of bonds
Cash generated from other financing activities 1,023,076.93
Subtotal of cash generated from financing activities 11,531,312,438.66 4,899,799,364.16
Repayment of borrowings 6,369,248,011.05 1,502,962,221.73
Payments for interest and dividends 668,095,998.12 640,026,892.15
Including: Dividends paid by subsidiaries to non-controlling
1,629,621.25
interests
Cash used in other financing activities 77,087,550.43 435,233,291.92
Subtotal of cash used in financing activities 7,114,431,559.60 2,578,222,405.80
Net cash generated from/used in financing activities 4,416,880,879.06 2,321,576,958.36
4. Effect of foreign exchange rate changes on cash and cash
22,282,446.23 -41,200,286.25
equivalents
5. Net increase in cash and cash equivalents 804,142,974.56 14,750,734.03
Add: Cash and cash equivalents, beginning of the period 3,097,899,703.76 1,743,269,944.67
6. Cash and cash equivalents, end of the period 3,902,042,678.32 1,758,020,678.70
8. Cash Flow Statement of the Company as the Parent for Q1~Q3
Unit: RMB
Item Q1~Q3 2018 Q1~Q3 2017
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 12,987,769,338.60 10,211,158,433.12
Tax rebates 130,863,528.45 76,021,688.23
Cash generated from other operating activities 2,759,126,679.00 2,170,305,324.47
Subtotal of cash generated from operating activities 15,877,759,546.05 12,457,485,445.82
Payments for commodities and services 11,185,702,814.55 8,461,788,230.31
Cash paid to and for employees 713,115,942.78 706,071,622.42
Taxes paid 1,158,672,182.51 94,128,545.77
Cash used in other operating activities 3,967,958,429.50 4,917,518,293.15
Subtotal of cash used in operating activities 17,025,449,369.34 14,179,506,691.65
Net cash generated from/used in operating activities -1,147,689,823.29 -1,722,021,245.83
2. Cash flows from investing activities:
Proceeds from disinvestment 224,007,998.00 180,900,000.00
25
Konka Group Co., Ltd. Third Quarter Report 2018
Investment income 111,276,583.85 163,986,057.87
Net proceeds from disposal of fixed assets, intangible assets
172,255.79 189,841.88
and other long-lived assets
Net proceeds from disposal of subsidiaries or other business
units
Cash generated from other investing activities 1,564,279,083.79 1,508,699,563.18
Subtotal of cash generated from investing activities 1,899,735,921.43 1,853,775,462.93
Payments for acquisition of fixed assets, intangible assets and
72,123,850.33 51,879,502.86
other long-lived assets
Payments for investments 2,022,767,387.50 804,349,598.00
Net payments for acquisition of subsidiaries and other business
units
Cash used in other investing activities 922,780,798.39 2,361,142,417.74
Subtotal of cash used in investing activities 3,017,672,036.22 3,217,371,518.60
Net cash generated from/used in investing activities -1,117,936,114.79 -1,363,596,055.67
3. Cash flows from financing activities:
Capital contributions received
Increase in borrowings obtained 4,899,799,364.16 5,407,249,831.51
Net proceeds from issuance of bonds
Cash generated from other financing activities 141,159,174.39
Subtotal of cash generated from financing activities 4,899,799,364.16 5,548,409,005.90
Repayment of borrowings 1,502,962,221.73 2,483,733,952.31
Payments for interest and dividends 640,026,892.15 199,132,587.57
Cash used in other financing activities 435,233,291.92 574,376.15
Sub-total of cash used in financing activities 2,578,222,405.80 2,683,440,916.03
Net cash generated from/used in financing activities 2,321,576,958.36 2,864,968,089.87
4. Effect of foreign exchange rate changes on cash and cash
-41,200,286.25 -1,161,524.85
equivalents
5. Net increase in cash and cash equivalents 14,750,734.03 -221,810,736.48
Add: Cash and cash equivalents, beginning of the period 1,743,269,944.67 973,613,753.40
6. Cash and cash equivalents, end of the period 1,758,020,678.70 751,803,016.92
II Independent Auditor’s Report
Indicate by tick mark whether the financial statements above have been audited by an independent auditor.
□Yes √ No
These financial statements have not been audited by such an auditor.
26
Konka Group Co., Ltd. Third Quarter Report 2018
The Board of Directors
Konka Group Co., Ltd.
30 October 2018
27
